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Issues involved:
The appeal involves the import of a drill ship under an exemption notification, the loss of sub-sea components in the sea, and the subsequent proposal to recover the exemption availed and penalize the importer for not re-exporting the lost goods. Summary: Issue 1: Exemption under Notification No. 21/2002-Cus. and loss of sub-sea components The appellant, M/s. Frontier Aban Drilling (India) Ltd., imported a drill ship under an exemption notification. Sub-sea components, including Blow Out Preventor (BOP), worth Rs. 5.75 crores, were irretrievably lost in the sea after completion of operations. The Commissioner found no violation of the exemption conditions as the goods were put to intended use and not diverted for any other purpose. Citing relevant case law and appraising manual instructions, the Commissioner treated the lost accessories as legal shortage, dropping the recovery proposal. Issue 2: Compliance with re-export condition and legality of Commissioner's decision The appeal contended that the certificate from the Directorate General of Hydrocarbons required re-export of the goods, and thus, the Commissioner's decision to drop the duty demand and penalty proposal was challenged as not legal and proper. However, the Tribunal found that the impugned goods met the exemption requirements and were not diverted, aligning with the appraising manual instructions regarding confiscated goods needing re-export. In conclusion, after considering the order-in-original, submissions, and relevant case law, the Tribunal upheld the Commissioner's decision, emphasizing that the impugned goods were not diverted and met the exemption criteria. The appeal was dismissed based on the findings, and the decision was pronounced in open court on 6-6-07.
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